Major changes to Velocity Frequent Flyer announced 17/10/24

[justinbrett]

Step 2: Complain about how dominant the QF group is and demand the divestiture of JQ

The government isn’t there to stop companies from making stupid business decisions.

QF didn’t do anything to make VA introduce these changes.

 

[33kft]

The first time since VA's existence (these sorts of profits).
They are clearly doing something right, don't you think?

Clearly VA felt something needed to change though, if it was a sustainable model why shake it up? I suspect they figured that something was going to give - my guess being that they had to choose between the revenue from FFs and less-FFs who were enjoying FF benefits, because as nice as semi-FF revenue was, if it drives the real FFs out due to overcrowding and perceived erosion of benefits, those profits couldn't be sustained.

 

[simmomelb]

they had to choose between the revenue from FFs and less-FFs who were enjoying FF benefits, because as nice as semi-FF revenue was, if it drives the real FFs out due to overcrowding and perceived erosion of benefits, those profits couldn't be sustained.

I couldn't agree more

 

[HS-TQE]

And perhaps de-prioritising Long Haul International codeshare customers and concentrating on their core business as a Domestic carrier with Short International destinations to Bali, Fiji and the Pacific Islands on the side? Considering VA are no longer in the business of entering international Joint Ventures (JVs) and effectively are either just content with the codeshare revenue from the international long haul partners, or are effectively just 'approved' travel agents to selected international destinations (the unilateral NZ partnership).

 

[hugamuga]

Not sure if anyone has mentioned it yet, but this change is hugely beneficial to FIFO workers in WA. Typically I am booked on Full flex tickets from PER to ZNE or KGI which are expensive but don't earn great status credits.

on the PER to ZNE for example the SC earn would usually be 25sc but this will change to around 67sc one way. Even flights booked through BHP which would usually give 15sc will now get around 33sc.

Would certainly encourage me request virgin > qantas more often.

 

[Stone]

Pondering the changes I have realised that it is a drive for more revenue from their international partners.

The 50% threshold for status qual/re-qual is “Virgin Australia marketed flights flown by you.” This would include code share flights. For example, VA5502, which books onto SQ262 (SYD to SIN). Economy often books into a flexi fare bucket and so is considerably more expensive than the available SQ fares. (Business is less affected).

I imagine the revenue that VA gets from the VA5502 ticket is considerably more than an SQ ticket where the flight is credited to Velocity.

 

[elanshin]

The first time since VA's existence (these sorts of profits).
They are clearly doing something right, don't you think?
Yes, perhaps some genuine competition, but do they need to do more?

It's hard to say. Short term sure, medium term unknown. QF has sort of fumbled the ball over but VA isnt necessarily doing things that will make customers loyal.

Does that mean VA will lose customers in the short term? No but it does mean that as the next generations get older there isn't necessarily an attachment to VA.

 

[33kft]

Not sure if anyone has mentioned it yet, but this change is hugely beneficial to FIFO workers in WA. Typically I am booked on Full flex tickets from PER to ZNE or KGI which are expensive but don't earn great status credits.

on the PER to ZNE for example the SC earn would usually be 25sc but this will change to around 67sc one way. Even flights booked through BHP which would usually give 15sc will now get around 33sc.

Would certainly encourage me request virgin > qantas more often.

Lucky for VA they don't have a lounge in DPS

 

[Happy Dude]

Not sure if anyone has mentioned it yet, but this change is hugely beneficial to FIFO workers in WA. Typically I am booked on Full flex tickets from PER to ZNE or KGI which are expensive but don't earn great status credits.

on the PER to ZNE for example the SC earn would usually be 25sc but this will change to around 67sc one way. Even flights booked through BHP which would usually give 15sc will now get around 33sc.

Would certainly encourage me request virgin > qantas more often.

Yes there'll be a few odd situations. Like the semi-regular occurrence when J is cheaper than Flex, SC hunters may actually choose Flex

 

[HS-TQE]

Pondering the changes I have realised that it is a drive for more revenue from their international partners.

The 50% threshold for status qual/re-qual is “Virgin Australia marketed flights flown by you.” This would include code share flights. For example, VA5502, which books onto SQ262 (SYD to SIN). Economy often books into a flexi fare bucket and so is considerably more expensive than the available SQ fares. (Business is less affected).

I imagine the revenue that VA gets from the VA5502 ticket is considerably more than an SQ ticket where the flight is credited to Velocity.

It's possible that VFF/VA may have done that (pushing people towards the VA coded tickets on their international long haul partners), but they would also be at the mercy of their partners releasing said seats to VA as well, considering there are other factors (their own FFs, OW/*A Alliance partners, etc) would be ahead of the queue in releasing seats ahead of unilateral aligned partners like VA.

 

[kangarooflyer88]

Starting to crunch the numbers on the changes to the award flight structure and thought I'd share some preliminary results for two of the tables computed thus far:
Flights Operated by Air Canada, ANA, Hawaiian or South African
Average Change:

• Economy - 6.3%
• Premium Economy - 6.39%
• Business Class - 6.20%
• First Class - 5.5%

Biggest Winner : Short Haul Business Class (Up to 600 miles) - 2.78% change
Biggest Loser: Long Haul Premium Economy (8,500-9500 miles) - 12.82% change

Flights Operated by Singapore, Etihad or Qatar

Average Change:

• Economy - 3.3%
• Premium Economy - 21.32%
• Business Class - 14.32%
• First Class - 9.96%

Biggest Winner : Multi-way tie all of these have no changes in award pricing:

• Economy (601-1200 mile)
• Economy (2401-4200 miles)
• Economy (4801-9500 miles)
• Premium Economy (1-600 miles)

Biggest Loser: Long Haul Premium Economy (7,001-8,500 miles) - 36.9% increase
Dishonourable Mentions:

• Premium Economy - much of it has experienced an increase of 20% or more
• Business Class (3001-3600 miles) - 29.82% increase

One major winner as was noted before are those people travelling between 15,000 and 20,000 miles (e.g. Sydney to São Paulo on Qatar) as this travel is now possible given the award band goes up to 20,000 miles (instead of 15,000 miles before).

-RooFlyer88

 

[Cynicor]

As is EVERY business, people that think a business does things out of the goodness of their hearts may be delusional.
A business is there to look after their bottom line for investors/shareholders, whether that be VA/Bain, Qantas or any other airline.
Every party wants a return on their investment.

Not completely true. My business exists to give me and my wife a place to work (we’re contractors for it). If that entity can break even then I’m happy. It employs 10 other people and having a great place to work is our primary goal. Putting my original money in was a sunk cost for happiness.

So for an airline, it’s possible to be run by someone who just wants to run a cool airline, and not aim to make more money. I suspect it’s unlikely to happen though.

 

[kamchatsky]

So for an airline, it’s possible to be run by someone who just wants to run a cool airline, and not aim to make more money. I suspect it’s unlikely to happen though.

I thought that was John Borghetti's VA1.0. Most AFFers loves it, VA didn't make money and require capital injection, and at the end it died in 2020.

Post automatically merged: Yesterday at 9:09 PM

Starting to crunch the numbers on the changes to the award flight structure and thought I'd share some preliminary results for two of the tables computed thus far:
Flights Operated by Air Canada, ANA, Hawaiian or South African
Average Change:

• Economy - 6.3%
• Premium Economy - 6.39%
• Business Class - 6.20%
• First Class - 5.5%

Biggest Winner : Short Haul Business Class (Up to 600 miles) - 2.78% change
Biggest Loser: Long Haul Premium Economy (8,500-9500 miles) - 12.82% change

Flights Operated by Singapore, Etihad or Qatar

Average Change:

• Economy - 3.3%
• Premium Economy - 21.32%
• Business Class - 14.32%
• First Class - 9.96%

Biggest Winner : Multi-way tie all of these have no changes in award pricing:

• Economy (601-1200 mile)
• Economy (2401-4200 miles)
• Economy (4801-9500 miles)
• Premium Economy (1-600 miles)

Biggest Loser: Long Haul Premium Economy (7,001-8,500 miles) - 36.9% increase
Dishonourable Mentions:

• Premium Economy - much of it has experienced an increase of 20% or more
• Business Class (3001-3600 miles) - 29.82% increase

One major winner as was noted before are those people travelling between 15,000 and 20,000 miles (e.g. Sydney to São Paulo on Qatar) as this travel is now possible given the award band goes up to 20,000 miles (instead of 15,000 miles before).

-RooFlyer88

Good list. You would need to call out the increased carrier charge for SQ as well

 

[BrianQQ]

they had to choose between the revenue from FFs and less-FFs who were enjoying FF benefits, because as nice as semi-FF revenue was, if it drives the real FFs out due to overcrowding and perceived erosion of benefits, those profits couldn't be sustained.

This logic would make sense if they got rid of the AMEX lounge benefits as well. Alas they have not.

VA would do better by you know, actually investing in their lounges and increasing their hours of operations for Premium Entry, as well as implementing boarding groups, etc. You know, stuff that would actually benefit loyalty. This is just a cash-grab decision that VA has no leverage for.

 

[henrus]

This logic would make sense if they got rid of the AMEX lounge benefits as well. Alas they have not.

There is a rumour on here that the next Amex VA Plat card will be released next week with an increased fee of $440 but a Virgin lounge membership basically included, it's starting to sound a lot like Delta!

 

[kangarooflyer88]

Completed my analysis on the remaining airlines covered by the award charts. For those who want to look at the figures, I've put together a Google sheets document that lists the charts by airline partner so you can see for yourself how these changes impact you. Feel free to let me know if there's anything I missed here.

To summarize the findings for the remaining airlines:

Virgin Australia (Domestic)

Average Change:

• Economy (Maximum number of points) - 21.28%
• Business Class - No change

Biggest Winner: Business class - no change in points required
Biggest Loser: Short Haul Economy (1-600 mile) - 30.3% increase on maximum price

Virgin Australia (International)

Average Change:

• Economy : 0.49%
• Business : 0%

Biggest Winner: Business class (no changes to points required)
Biggest Loser: Short Haul Economy (1-600 miles) - 1.28% increase

United Airlines & Virgin Atlantic

Average Change:

• Economy: 8.21%
• Premium Economy 7.09%
• Business Class - 6.68%

Biggest Winner: Premium Economy (4801 miles to 5,000 miles) : 14.34% drop in points required
Biggest Loser: Premium Economy (11,001 miles to 15,000 miles) 48.38% increase

Note: Virgin Australia has played around with the milage bands for United & Virgin Atlantic

-RooFlyer88